Homeowners association wants developer to pay taxes, expenses

Q: The builder of our subdivision has transferred control of the homeowners association to the residents.

Q: The builder of our subdivision has transferred control of the homeowners association to the residents. The builder still owns property in the subdivision for which it has not paid dues.

In addition, the builder recently sent the association a tax bill for lake property that the builder still has title to. Should the association pay the tax bill for that property?

Are we within our rights to ask the builder to pay association dues for the other property it still owns?

A: You would think that a development company ought to pay taxes and expenses on property it owns, even when that property is part of a homeowners association. The answer is: not always.

When a developer transfers control to an association, it typically also transfers ownership rights to any land it owns to the association.

You might want to investigate further to determine what the association documents say about the transfer of control, and what they say about the lake land still owned by the developer.

The association might have to hire a lawyer with extensive knowledge of community-association law.

If you find out that the company still has title to the land, this might be the time to remind it to transfer title to the association. Depending on the size of your association, the developer might also need to give the association an accounting for money it received during the time it collected money from homeowners and the time it transferred control to the association.

You also should know that strange situations might arise in which an owner — even a developer — retains ownership of land that is used by the association. In that situation, the association might have an easement to use the land and might even have to pay some of the expenses to use the land, but title to the land remains in someone else’s name.

Again, you need to review state law and the association documents to see what they say about the transfer.